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Original poster

Is 150k a large mortgage?

79 replies

julesjam · 11/04/2013 15:07

...for a 4/5 bed house in Scotland, garden, garage, 2 recep etc. worth around 250k

Payments would be around 600/month. We're lucky to have a small mortgage atm because we bought about 8 years ago, so have a lot of equity in the current property, but increasing to 150k would more or less double our payments.

Is this reasonable? I'm trying to convince DH that it's doable but I think he's a bit Shock. Am I, in fact, deluding myself??

OP posts:
Rosesforrosie · 11/04/2013 15:09

Doesn't sound large to me. Our payments are larger than that and our mortgage technically 'smaller'.

But depends what you earn (take home) each month really doesn't it?

titchy · 11/04/2013 15:13

Well it's all relative isn't it! What is large for you is tiny for someone else!

If it is more than 3.5 your joint salaries then some lenders would regard this as large.

Original poster
julesjam · 11/04/2013 15:16

It's approx 1/5 of take-home pay - that's about average isn't it?

But then, I suppose it's a bit over 3.5 times joint salaries. But I think our mortgage lender will lend us it, from previous discussions with them.

OP posts:
nipersvest · 11/04/2013 15:19

where are you getting a 150k mortgage with payments of 600 a month from?

our mortgage is around the 150k mark, but our payments are more like 1k a month! am now worried we're overpaying Sad

Doyouthinktheysaurus · 11/04/2013 15:19

It'll be huge to some and small for others but it's all related to your income, nothing more.

Can you afford the repayments comfortably and will that still be the case if interest rates rise which they will at some stage?

Are your dh's concerns justified?

Naoko · 11/04/2013 15:19

I'm paying not far short of £600 in rent for a two bed mid terrace in the arse end of nowhere, and that's quite a lot more than a 5th of our income. I'm now considering moving to Scotland.

orangeandlemons · 11/04/2013 15:20

Yeah mines 130k and our payments are785 per month

Winterwardrobetime · 11/04/2013 15:20

This reply has been deleted

Message withdrawn at poster's request.

DiscoDonkey · 11/04/2013 15:22

Nipersvest, that does sound like a large monthly payment. Do you have a high interest rate? We don't pay that much and our mortgage is over £200000.

nemno · 11/04/2013 15:22

I think that is large based on multiple of salary. With interest rates so low I don't think you should be basing it on current monthly payments. Consider that it is very likely that over the lifetime of a mortgage the interest rates will be much higher at some times.

GoatsHaveStrangeEyes · 11/04/2013 15:23

Our mortgage is £140k and it feels huge to me but to others it can seem tiny. Our payments are £575 a month.

wonkylegs · 11/04/2013 15:24

As everybody says you can't generalise on these things it's all about your ability to pay not the actual amounts involved.

badguider · 11/04/2013 15:25

It's only 60% of the property value so as long as its not an inflated price or new-build it shouldn't go into negative equity.
Have you worked out what the repayments would be if interest went back to 6% (as it was around 2005)?

patchesmcp · 11/04/2013 15:29

You can't necessarily compare what you pay against what someone else does as you also need to factor in the term the mortgage is over, not just the amount borrowed and interest rate.

OP I agree with the people who say it depends entirely on what you can afford. How much money will you have left at the end of each month to cover food, gas, electricity, water, council tax etc - all the essentials and will you be able to cover unforseen bills etc? How would an interest rate increase impact on you? Answer those questions and you'll know if you can afford it.

TheDoctrineOfSnatch · 11/04/2013 15:31

One fifth of income sounds less than average.

EuroShaggleton · 11/04/2013 15:33

It's all relative (to income and ppty value). Our current mortgage is about 280k but we are thinking about moving and doubling it. We live in London and want a bit more room.

It's definitely worth considering the impact of increased mortgage rates - there is only one way they can go from where they are now.

woozlebear · 11/04/2013 15:34

I thought a third of income was the tradional average and in the SE now it's more like half for a lot of people.

FasterStronger · 11/04/2013 15:36

badguider's advice is spot on. plan for interest rates returning to normal levels.

it is not about whether anyone else thinks it is large or small, affordable or not.

if you look though your bank statements, can you afford it? how about putting together a spreadsheet and looking at your spending over the last year?

Doyouthinktheysaurus · 11/04/2013 15:36

Our mortgage is £90k and we overpay £200 a month roughly so repayments are £650 a month which is slightly more than 1/6 of our income.

We are comfortable and able to save each month, but that's it! I wouldn't want a bigger mortgage than that tbh.

It's very individual though. Only you and your DH know what your priorities are and what your outgoings are.

Original poster
julesjam · 11/04/2013 15:37

Thanks for the input folks. I know, it's a bit more complex than just the basic figures etc. and I'm also looking closely at the monthly budget to assess whether it really is truly affordable. I suppose I'm just after a sense of perspective in general terms.

If you had all looked horrified and said 'that's WAY too much - don't do it!' then I wouldn't have wasted any more breath on it! Or 'WOWSERS that sounds like a good deal' then I'd be picking up the phone, no matter what DH says... As it is, sounds like it's just one of those things we'll need to figure out based on our own sums.

OP posts:
Khaleese · 11/04/2013 15:42

Nipersvest, now is the best time to overpay!!

It's all relative to your salary, job security, outgoings and your age.

Rework it on 8% and you will have an idea of how you would survive if it all goes bad. (Although interest rates have been 14%! Plus.)

myron · 11/04/2013 15:58

£600 monthly payment is a bargain! Assuming you have no other loans or liabilities outside of the mortgage which is only 20% of net income - I would say it's definitely affordable. I would guess that you wouldn't be able to rent a similar house for that amount. Our mortgage is more but our monthly payments are over twice that amount due to a shorter term. It's all relative to income, job security, etc.... My friend has a £375k mortgage but has a similar monthly payment to me but hers is over a 30 yr term so 20 yrs more than mine!

Original poster
julesjam · 11/04/2013 16:48

I believe we can afford it, although of course at first we will probably notice an extra couple of hundred leaving the account each month. And I don't think we'd be pushing ourselves to the max - and if there were any difficulties there's potential for slightly more income (I work freelance as well as p/t and could up my f/l work) and flexibility on mortgage payments with the lender with the term etc

DH is being cautious - and rightly so, it's a lot of money. But I'm the one that handles all the bills and budgeting in our house, all he does is earn it and spend it! so I feel like I need a bit of external advice.

OP posts:
specialsubject · 11/04/2013 17:30

what happens if the income stops - no-one has a secure job, anyone can get ill. Is it a fixed rate - there's only one way rates can go, although base rate is now forecast to stay low for another two years.

just things to add to the equation.

Original poster
julesjam · 11/04/2013 18:16

Specialsubject unless I've misunderstood you think we're both not in secure jobs? Not the case - I'm employed pt by a large company, dh is an instrumental teacher, employed by the local council. I'm not naive enough to believe we will never become redundant or become ill, just correcting the impression I may have given that we're not in fairly stable forms of employment.

OP posts:
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